This matter involved the consequences of a federal court’s dismissal of a case and whether the plaintiff’s subsequently filed state court action was barred by principles of res judicata or other legal doctrines. Plaintiff Randi Zupko filed a complaint in federal district court against defendants County of Ocean, Scott Waters, and Robert Greitz. After the federal court matter was dismissed, plaintiff Zupko filed a lawsuit in state court, asserting only state law claims. The issue in Zupko v. County of Ocean, 2025 N.J. Super. Unpub. LEXIS 1884 (App. Div. Oct. 7, 2025) was whether that lawsuit was barred by the federal court’s dismissal of the federal court action when the district court judge explicitly declined to exercise supplemental jurisdiction over the state law claims.
Plaintiff Zupko was a former County of Ocean employee and initially filed his lawsuit against defendants in District Court, making claims under both federal and state law. The defendants successfully moved for summary judgment, obtaining a dismissal of the federal lawsuit in its entirety. It was initially dismissed without prejudice by the District Court judge. In the court’s written memorandum opinion, the judge expressly dismissed plaintiff’s state law claims and her federal claims falling under 42 U.S.C. §1983 without prejudice and permitted plaintiff to file an amended complaint. However, in that opinion, the District Court judge explicitly declined to exercise supplemental jurisdiction over the state law claims.
Thereafter, plaintiff did file an amended federal complaint and defendants renewed their arguments for a dismissal. The District Court judge once again dismissed the claims without prejudice but granted plaintiff another opportunity to amend the federal complaint. Plaintiff did not do so and, hence, the District Court judge entered a final order, dismissing the federal claims with prejudice and dismissing the state law claims without prejudice.
In the second memorandum opinion, the judge specifically wrote that the court “does not address defendants’ remaining arguments in support of their motion regarding plaintiff’s state law claims.”
Thereafter, the plaintiff filed a complaint in state court and this time only asserted state law claims. Defendants again moved to dismiss and argued this time that the state complaint was barred under principles of res judicata. The trial court judge agreed with defendants and dismissed the state complaint. This appeal ensued.
The Appellate Division reversed the trial court decision, finding that the court made a mistake in dismissing the state court complaint. The Court noted that under New Jersey law, “plaintiffs who assert related federal and state claims in federal court are free to reassert in state court the claims that the federal court declined to adjudicate.” The Appellate Division noted that was exactly the situation in this case in which there was no decision ever made by the federal court on the merits of plaintiff’s state claims.
The Court further noted that the decision to decline supplemental jurisdiction was well within the District Court judge’s discretionary power. Under the case law, state claims may be dismissed without prejudice and left for resolution to state tribunals.
The Court noted that the principles of res judicata did not bar plaintiff’s state law claims. This doctrine barred re-litigation of claims or issues that have already been adjudicated. But it requires that the adjudication be on the merits. A cause of action between parties that has been finally determined on the merits cannot be relitigated by those parties.
The Appellate Division pointed out that the federal court never issued a final judgment adjudicating “the merits” of plaintiff’s state law claims. To the contrary, it carved them out and preserved them for a future state court action. Hence, an essential ingredient of res judicata, a final judgment on the merits, was missing.
Thus, the Appellate Division reversed the trial court’s dismissal order and reinstated plaintiff’s state law claims. By doing so it did not reach, nor did it comment upon the substance of those claims, but did permit the state law claims to proceed.
